Germany's planned core hydrogen pipeline network is oversized and "too ambitious" as supply and demand will remain far below previous expectations, the country's federal audit office has said.
The audit office has urged the government to conduct a "fundamental review" of Germany's hydrogen strategy as the country is set to miss targets for domestic production and imports by a wide margin.
The "hydrogen ramp-up is not going according to plan" even though Berlin has made "billions in funding" available to the sector and a potential underutilisation of the future hydrogen network "poses significant risks to the federal budget", the audit office said.
Plans for the core network foresee that over 6,000km of hydrogen pipelines will be operational by 2030. This could correspond to exit capacity from the grid of nearly 60GW and entry capacity of close to 70GW, the audit office estimates, noting that this far exceeds what will be necessary.
The body expects that Germany's installed electrolysis capacity will remain below 5GW by 2030, less than half of the 10GW target from the 2023 strategy. Imports will also not materialise as planned because cross-border pipelines — which account for over half of the planned entry capacity — and infrastructure for seaborne imports, such as ammonia crackers, will not be ready by 2030, the audit office said.
Demand for exit capacity will also not materialise as expected, the body said. Around 62GW, or 70pc, of the core network's exit capacity was foreseen for deliveries to future hydrogen-fuelled power plants. These plants were a central element of the previous government's decarbonisation plans but have been put on the backburner by its successor and large-scale deployment of hydrogen for power generation remains a distant prospect. Potential hydrogen consumers in other sectors, most notably steelmaking, have also pushed back their plans or cancelled them altogether.
Germany's gas network operators are building the hydrogen grid with government-backed loans that will be repaid over time with revenues generated from tariffs levied on users. But this financing mechanism "could place an additional burden on the federal budget amounting to tens of billions [of euros]" if the hydrogen ramp-up fails and the network is heavily underutilised, the audit office warned.
